Received an inquiry about how the Business Model of Douyin, Kuaishou and Xiaohongshu can help Business Owners to make money lately.

First of all, let’s take a look at how those Apps are running their business.

Business Model of China Short Video Apps
Business Model of China Short Video Apps

There are three major parts: Public Traffic, Content Layers & Experiences Creation and Commercial Cash-in.

1. Public Domain Traffic:
Make use of online traffic tools such as search engines, advertisement. Most importantly, hire or partner with those already famous KOLs and KOCs (Key Opinion Consumer) to create trendy posts, leaving comments and advertise the platform.

2. Content Layers & Experiences Creation:
Strategically choose the hot topics and create posts to make sure you group a bunch of same interest fans. Then what you need to do is to follow up the quality of the contents before flushing the same kinds of info to the group. It helps to make sure the fans stick to your platform.

Since when did you love texts than pictures and videos? The generation nowadays prefers short, immediate and fancy info than reading long paragraphs (not on the purpose of digging deep into something). Thus, short texts, pictures, and short videos with nice background music helps a lot of retailers, factories and corporate to sell their product online.

When it comes to selling products online, customers do not only go to Taobao, T-Mall or other E-shops to just look at the pictures and click to buy. Rather, they tends to believe KOLs showing their lovely faces and telling them how good the products are by using/showing them in front of the camera. That’s why live streaming function came along.

It creates an experience of not only seeing the products and their trusted KOLs but also to interact with the KOLs by leaving messages, comments and the KOLs can response LIVE to them.

LEARN MORE: How does the China Mobile Internet Perform?

3. Commercial Cash-in:
So in what sense are you allowing the KOLs or sellers to start selling on your platform? It is not hard to get the answer- open the E-shop on their platform. This is one of the way they can cash-in, and after the first few months of selling, you may find that you want to have more traffic to your shops. Now there it goes- the platform (App) controls the traffic flows- you can subscribe different plans to boost up your traffics.

Some platforms, on the other hand, also offer different virtual gifts for the fans to purchase (which usually costs only a few Yuan) and send to their favourite KOLs. So why the KOLs would like those virtual gifts? I’m sure I don’t have to say it.

In recent months, these Apps started to authorize selected accounts to post videos which can be up to 10 mins. The reasons are, first, short videos can only satisfy the time gaps of fans, yet, longer videos can attract advertisements, and even pay-for-knowledge options as you have more time to talk about one topic in depth.

Talking about ads on the Apps, you may discover it usually comes up with Games. The games in China now offer unbelievable “red pockets” that can be cash-in by the players. It created a huge competitions among different game developers. Let’s go back to talk about ads.

Not only ads placement can bring in monetary vales, but also bringing in Actors and celebrities. Jay Chou did a live streaming on Kuaishou on 26 July 2020. It is a shocking news to a lot of people including the industry as Jay Chou can attract huge numbers of fans downloading and registering on the App. How often do you uninstall an App? What makes you uninstall? As the App must have contents that suit your interest, it is not that easy to make someone uninstall it somehow. That’s how Kuaishou work to engage more fans and users.

LEARN MORE: 2020 Douyin User Portrait Report: DAU over 400M

4. Summary:
Find the hot topics – Gather the fans – Improve the quality of your contents – Create experiences for the fans – Cash in with different channels

This article is not only talking about how these Apps are running their businesses. If you can take a closer look, that is also how you market your own business especially in China.

As you already have your company setup and developed (chose your topic), next, you should gather your fans as a community or circle (to feed them with their interest). For existing clients and to reach more potential clients, you make sure the quality of your products/services with an amazing experience, then you cash in with that or even other possible channels outhere.

We are MirrorBell Consulting. Write us an email at info@mirrorbellconsulting.com or visit our website to understand more. We will assist you to reach your targets in and out China.

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